Debit Card Advantages and Disadvantages

Debit cards is the most convenient way of spending your money instead of carrying cash all around and then worrying about losing the same. Debit card is plastic money as it is quite often referred as and is similar to credit card but is linked to your bank account. When you make any purchase, you are supposed to swipe your card and the money is directly debited from your bank account. Though, it is similar to credit card, but in this case unlike credit card you cannot spend more than you have in your account and thus you do not increase your credit score.

It functions in two ways. Firstly like an ATM card that allows instant withdrawal of money. Secondly like a check where the money used for buying any item is deducted from your account in a day or two whenever your retailer presents the transaction to the Bank.

Using a debit card has some advantages and disadvantages. Let’s glance through some of them.




The Advantages of debit cards

  1. Highly Convenient

The most important advantage of using debit card is its convenience to use. The transaction involving the debit card is instantaneous as the money is directly deducted from your bank account. This is more convenient as you need not to wait for the transaction to get over or worry about carrying enough cash to cover all your expenses. It is also faster than writing a check.

  1. Handy Cash card

For sure debit cards are of great use but sometimes you need cash especially while roaming onto street markets, you need to have cash in hand for your purchases. Debit cards are capable of giving you cash. You swipe your debit card in any ATM and use it to withdraw cash.  Many stores also offer cash back points on use of debit cards.

  1. Pin number Protection

    Debit cards usually come with a four digit pin number that is significant to you. You require this pin to make any kind of purchase. The pin protects you against any probable theft. In case you lose your card, you can block your card very easily and protect it from being used further.

  1. Anyone Can Have One

    The prime requirement of having a debit card is a bank account. Anyone can open a bank account with any bank even with minimum deposit. Thus, having a debit card is much easier than having a credit card as approval for credit card mostly depends on your credit score and payment history. However, these things are not considered while having a debit card.

  1. Strong Budgeting Tool

    The greatest advantage of having a debit card is that you cannot spend more than what you have. This prevents you from accumulating new debt.

The Disadvantages of Debit Cards

  1. Does not help Your Credit Score

    Your credit score impacts you all through your life be it positive or negative. The debit card does not help you to impact your score which means you cannot build it. The importance of having higher credit score is lower interest rate and increase in the credit limit.

  1. Fees Galore

    Banks impose various fees on debit card holders that add up to a large amount sometimes. These include monthly use charges, major overage fees and others.

  1. Instant Money Means Instant Risk

    In case someone gets hold of your card and you do not report it immediately, the thief will be able to withdraw money from your card instantly with your pin number.  Also, the charges levied on a credit card are easily disputable and will never interfere in your line of income like the debit card.

  1. Merchant Blocks

    The merchants many a time mark a hold or a lien on your money just to ensure that you have sufficient money to go ahead with the transaction.  This hold is generally put by gas pumping stations where they put a hold before pumping the gas in your vehicle. The hold is released by the bank generally after 48 hours and thus leads to blocking of your funds for sometime.